1993 – Hewlett Speeches

Hewlett says it is hard to believe that Peter Voll has been organizing trips for the Stanford Alumni for 18 years – 436 of them. He says he has been on seven of them, and he reminisces about some of these. He closes saying, “Peter, we really will miss you. You have been a major contributor to Stanford Alumni and served as an example to many universities to set up and operate similar programs. You have set a marvelous example and we are going to miss you.

Hewlett refers to the speech given by Dr. George Heilmeier who was the previous award recipient. He says Dr. Heilmeier “talks about the problem of research in product development and problems associated with launching a new product.

Taking a different approach to the problem of developing new products, Hewlett says, “When Hewlett-Packard Company was small, we could not afford the luxury of maintaining a laboratory to engage in research. Rather, we had to depend upon our ability to take a proven idea and reduce it to practice. We were in a business that depended upon having a large number of items in the catalogs, rather than a few major devices, and we had to depend on taking proven ideas and making instruments out of them.”

“One way to obtain such ideas, of course, is to read all the literature. In theory, this is possible, but it would take a remarkable mind to acquire and collate all such information. There are certain alternative approaches. I would like to mention a few.”

The first one Hewlett mentions is taking a suggestion from a third party: ‘Have you ever thought of this?,’ and he tells of an incident involving Barney Oliver, who later became HP’s Director of Research. Hewlett had known Barney when they were both at Stanford, and Hewlett would visit him at Bell Labs from time to time when he was in the East.

As Hewlett relates it, they had, for years, been trying to “push the frequency range of our RC oscillators to the highest possible level, but we never could achieve a real breakthrough. One day, assessing our product line, Barney asked, ‘‘Have you ever thought of using a ring structure for this purpose?’ After he mentioned it, it was obvious that this was the way to achieve the higher frequency levels that we were seeking.”

Hewlett goes on to say that following this suggestion from Barney Oliver, they were able to develop an oscillator “that went from 10 hertz to 10 megahertz in 6 decades. This was a maximum frequency about 30 times larger than we had ever been able to achieve by conventional methods.”

Hewlett says a second source for product ideas is “taking proven technology from one application and applying it to another.”

As an example, he tells of one of their distributors who one day asked, ‘Have you ever thought of using the principle of a flux gate compass to build an instrument that you could simply clip over a wire and measure direct current?’

“Using this principle,” Hewlett says, “we were able to design such a device that would measure a curve as small as 3 megahertz. The field so measured was about 1/300 of the earth’s magnetic field. Such an instrument being a clip-on had the obvious advantage that one did not have to break the circuit to make the current measurement.”

The third possible source for ideas Hewlett mentions is “combining two or three technologies to create a different class of product.

“A good example,” he says, “was our first desktop calculator. One of our engineers had been pushing us for some time to get into the computer business, but we were reluctant to do so. Not to be discouraged, he demonstrated a calculator of extremely simple characteristics and yet very powerful. Unfortunately, it was limited to add, subtract, multiply and divide, but its simplicity and the fact that it used reverse Polish notation made it very effective.

“At the same time, we found two engineers in southern California who had devised an algorithm which could handle trigonometric and logarithmic functions. Whether these two ideas were compatible and could be combined in a single instrument was the question.

”The short study project demonstrated that the two were compatible and we built a very sophisticated desktop computer. Incidentally, we didn’t call the product a computer. If we had called it a computer it would have been rejected by our customers’ computer gurus because it did not look like an IBM. We, therefore, decided to call it a ‘calculator,’ and all such nonsense disappeared.”

“A different type of example on a broader base is the case where a broad technology has been developed and is readily available, but industry has not been smart enough to pick it up. An example was the work done by W. Edwards Deming and Walter Shewhart in the field of statistical quality control (SQC).

Hewlett tells how the Japanese, after World War II, found their production in chaos. They had great difficulty competing with the West, particularly in the areas of quality and cost. Deming, an American, went to Japan and taught the principles of scientific quality control. The Japanese recognized the value of quality control and were able to reduce the cost and increase the quality of their products. American industry largely ignored the Deming methods, and Hewlett says “Hewlett-Packard was a very good example of such blindsidedness.”

Hewlett says, he is glad that American auto makers have now embraced the Deming method, with a corresponding sharp increase in quality and productivity.”

“I cite these examples,” Hewlett says, “to show there are many things around us that we can borrow from or use – many approaches to getting ideas and turning them into viable products.

“I am not trying to denigrate the importance of invention. One only has to look at the transistor industry to realize what a tremendous change it brought to the electronics industry.

“But I hope I’ve been able to show you, through my own experiences at HP, that research is expensive and it’s uncertain. For this reason, it behooves management to make sure that there are some alternative proven techniques that can help reduce the total cost of developing new products.

“I’d like to thank the Academy again for this award and for the chance to share my thoughts with you on some practical alternatives for product development.”

10/6/93, 3X5” cards upon which Hewlett has written notes for his speech. Appears to be an earlier draft

10/6/93, Copy of the printed award statement

10/6/93, Copy of the printed program for 10/6/93 NAE meeting, including the award presentation

10/6/93, Copy of list of registered attendees

8/27/93, Letter to Hewlett from Chuck Blue of NAE sending a copy of the complete meeting program

5/25/93, Copy of a letter to Hewlett from Robert M. White, President, National Academy of Engineering, (NAE), saying he has been selected as the recipient of the 1993 Founders Award of the National Academy of Engineering, to be presented on October 6, 1993 in Washington D. C. A press release announcing the award is attached for his approval.

9/14/93, Transmittal sheet from NAE to Hewlett sending a ticket for the NAE luncheon

9/17/93, Copy of Hewlett’s travel itinerary showing trip from SF to Washing D.C. of Tuesday 10/5; Washington D. C. to Portland OR on Wednesday 10/6/93 for a visit to HP’s Vancouver WA plant. Also copies of travel tickets

9/21/93, Form letter from NAE to all meeting registrants sending confirmation of registration

10/5/93, Transmittal letter to George Heilmeier from Mollie Yoshizumi sending a copy of Hewlett’s speech for the NAE award ceremony

10/6/93, Letter to Hewlett from George Heilmeier saying he was glad to receive the copy of Hewlett’s speech and discussing his work on liquid crystal displays

Undated, Copies from a dictionary which shows definitions for such words as innovate and innovation. Again probably research for Hewlett

1/4/93 [should have been 1994], Letter to Hewlett from Robert M White of NAE giving him, for tax purposes, the appraisal value of the gold medal which was presented to him at the Founders Award ceremony – $4,410

Hewlett talks about Howard Vollum in the early days of his career. He says he was in Washington D.C. when Howard was in the Signal Corps, and he kept hearing about a ‘genius’ who was working on a radar to locate portable mortars. “These field pieces were giving our infantry a lot of trouble,” he says, “and by the time you could locate one of them using conventional means the mortar would be moved by the time you could do anything to counter it.” Without going into detail as to how Vollum’s device worked, Hewlett says it was very effective. “I was so impressed with Howard,” Hewlett says, “ that I wrote to Dave Packard and recommended he hire him.”

However, Howard came back to Portland and joined Tektronix a company that made oscilloscopes. Hewlett tells how HP and Tektronix each went their own ways for a while, but then HP decided to go into the oscilloscope business too – ignoring the adage, ‘Never attack a fortified position unless you have to.’

Hewlett says their first product was “a bunch of junk, adding that HP’s entry into the field served to “intensify Tek’s efforts. Despite all our best efforts we made little progress. We would make a technical breakthrough, and Tektronix would come up with something better. I think the best we ever did was to increase our penetration to about 15% [of the market.]”

Howard’s death,” Hewlett says, “was not just a loss to the company, but a loss to the community and the country as a whole. But we were left with an indelible impression, “Never attack a fortified position unless you absolutely have to.”

10/7/93, Earlier draft of talk handwritten by Hewlett

10/5-7/93, Copy of Hewlett’s schedule including visit to HP plant in Vancouver, Washington

10/7/93, Material from program folder containing schedule for October 7, as well as other papers relevant to the day

6/8/93, Note to Mollie Yoshizumi, Hewlett’s secretary, from the travel office with a suggested itinerary

3/30/93, Letter to Hewlett from Douglas C. Strain telling him of the forum on “The Technology of Business in the Pacific Century,” sponsored by the Oregon Graduate Institute of Science and Technology. He says that the Board of Trustees, Jean Vollum, and he, would like to present Hewlett with the Howard Vollum Leadership Award as a part of the forum activities.

4/8/93, Copy of a letter from Hewlett to Douglas Strain accepting the invitation, and adding that he held Howard Vollum in high regard, and had once suggested Dave Packard hire him.

4/30/93, Letter to Hewlett from Thomas Wilson, Vice President, Development, of the Graduate Institute saying he is pleased Hewlett will be attending their forum.

5/13/93, Copy of a letter to Wilson thanking him for his letter

8/27/93, Letter to Hewlett from Douglas Strain attaching an invitation to a private dinner the evening of October 7.

9//13/93, Note to Hewlett from Andrew Ould [HP PR?], saying a Stu Watson of the ‘Oregon Business Magazine’ would like to interview him during his visit, and asks if Hewlett wants to comply. Handwritten note on letter says Ould advises interview cancelled.

9/16/93, Copy of an HP newsgram telling of Hewlett’s award – sent to Hewlett by Betty Gerard

9/17/93, Copy of itinerary, sent to Hewlett by travel office

9/24/93, [date received by WRH], Note to Hewlett from Douglas Strain confirming dinner on October 7, and notifying him of change of location

9/30/93, Copy of a letter to Hewlett from Tom Wilson, of OGI, attaching the schedule for the day of the award, plus a list of speakers with a short biography on each

9/30/93, Copy of a letter to Hewlett from Robert Mims of the OGI, attaching an agenda for the award dinner

9/30/93, Note from Mollie Yoshizumi to Hewlett’s daughter, Mary Jaffe, in Portland, attaching a copy of Hewlett’s flight itinerary for the trip there, and a copy of a letter to Hewlett from Dick Snyder, GM of HP’s Vancouver plant, discussing plans for his visit there on October 8

10/4/93, FAX to Hewlett from Jerome J. Meyer, Chairman and CEO of Tektronix, sending a copy of a printed message to Tektronix employees containing a statement of their corporate objectives

10/28/93, Letter to Hewlett from Douglas Strain, Vice Chairman, Electro Scientific Industries, thanking him for coming to Portland, and reminiscing about all the help he got from both he and Dave Packard when they were starting ESI in 1950. He encloses a statement of ESI ‘Management Principles’ much of which he admits was borrowed from HP.

June, July, August issues of “Elements,” a newspaper published by the OGI

1/12/94, Note to Hewlett from Lyle M. Nelson of Stanford, enclosing a clipping from an OGI publication which contains a photograph of Hewlett at the podium during the Vollum award dinner. Hewlett, although smiling, has his eyes shut. Lyle comments he “looks better with his eyes shut than with them open.”

9/30/94, Letter to Hewlett from Ed Coolly, OGI Chairman, and Dwight Sangrey, President, telling him that Sangrey is leaving as OGI President, to be replaced by Paul Bragdon

12/18/97, Letter to Hewlett from Paul Bragdon, OGI President, telling him of OGI’s favorable financial status, along with a listing of recent grants

In this speech Hewlett describes the history of Silicon Valley, particularly during its formative years, and the important role played by Stanford University.

“Silicon Valley did not just spring out of nowhere,” he says. “There had been activity in electronics in the Bay Area for almost 50 years before the transistor was invented. In fact, it was just 90 years ago that Marconi established a branch of his company, Marconi Wireless, in the area. He had already established radio communication to England from Cape Cod in Massachusetts. He wanted to use the new facilities at Bolinas, California, to establish a trans-Pacific link.

“Interestingly enough, the first semiconductor work carried out in the Valley did not use silicon but another element called germanium.

Hewlett suggests starting at the beginning, and he says the beginning starts with Stanford. “The founding grant of the University laid great emphasis on the professional aspects of higher education. The first President, David Starr Jordan, who himself was an ichthyologist of some note, attracted an outstanding group of faculty members in various fields of science and engineering.

“An early graduate in engineering by the name of Cyril Elwell became the archetype of the technical innovators that were later associated with Silicon Valley. Prior to Elwell, there had been some experiments in radio transmissions, including the early work on ship-to-shore and point-to-point communication. At that time, high-powered radio signals were generated by means of an electric arc, that is, an electrical discharge across a gap. It was not suitable for voice transmissions but it could be used for Morse Code.

“Elwell heard about an invention in Denmark of an improved arc by a man by the name of Valdemar Poulsen. This arc was much more stable than previous arcs. It used a large magnetic field and a special atmosphere to achieve this performance. Furthermore, it could be used for high-power voice communication. Elwell went over to Denmark and essentially, without a nickel in his pocket, bought the invention for $250,000 and then came back to the San Francisco area to try and raise the money.

The Poulsen Wireless Telegraph & Telephone Company was formed to exploit this patent. This name was later changed to Federal Telegraph Company. It is interesting to note that the President of Stanford, Dr. Jordan, invested $500 in this venture and encouraged other members of the faculty to do the same. The Federal Telegraph soon attracted a bevy of smart and creative engineers. One such engineer was Lee De forest who in 1906 had invented the Audion, the first vacuum tube. While working on the Audion in Palo Alto in 1912, just a year before I was born. He perfected the device so that it would both amplify sound and, in addition, was capable of generating stable radio frequencies. As a matter of interest, the house where De Forest did his work was not more than three blocks from where Dave Packard and I started our venture.

“Two young engineers from Federal Telegraph left the company in 1917 to found a new company north of San Francisco to exploit a new principle for a loudspeaker. The company so formed was the Magnavox Company which subsequently moved east and still is an active, well-established company. One of these two engineers, Peter Jensen, later formed his own company which became known as the Jensen Speaker Company. It is interesting that these loudspeakers made modern public address systems practical. In 1919, President Wilson addressed an audience of about 50,000 people in San Diego using these loudspeakers.

“In 1921, two young engineers by the names of Ralph Heintz and Jack Kaufman combined to form a company of that name that specialized in commercial radio equipment and made some of the first air-to-ground radio systems.

“The capabilities of this new air-to-ground system were dramatically demonstrated during one of the Dole Airplane races from San Francisco to Hawaii. One of the planes was equipped with one such radio, the power for which was derived by a small wind-driven generator. The faster the plane went, the faster the wind generator rotated, and the whine of the wind generator could be heard in its radio transmissions. At the time of the race, amateur radio was just coming into vogue and the communications from the plane were monitored by amateur operators all over the world.

“This was an era in which navigational instrumentation for airplanes was very primitive. The plane with the radio transmitter became lost in a cloud and could not tell up from down. Although he did not know it, the pilot started in a power dive, and all over the world, the increased itch of the radio signal indicated that the plane had picked up speed and was probably in a dive. Suddenly, all transmission stopped – no trace of it was ever found.

“Meanwhile, Federal Telegraph had been merged with MacKay Radio & Telegraph Company and eventually was acquired by International Telephone & Telegraph Company and moved East. Many of the engineers, being good Californians, did not like being transplanted and soon returned to the Bay Area. One such person was Charles Litton. Charlie planned to make the very large vacuum tubes required for high-powered radio broadcasting. Charlie was a superb mechanic and he decided that if he were to build good vacuum tubes, he needed a special lathe to assemble them. He designed and built such a lathe. Before he was able to use it, however, somebody from one of the larger radio manufacturing companies saw it and wanted to buy it. Charlie sold it to them and the same thing happened several times over, so that Charlie wound up in the manufacturing of glassblowing lathes and never really got around to building the vacuum tubes he originally intended to.

“This ability to make vacuum tubes was very important to this country during world War II. Charlie turned his plant over to his foreman with the understanding that these lathes were to be sold at cost on the theory that it was not proper to profit from the defense effort. Charlie did consulting to support himself. At the end of the war, he became frustrated with manufacturing and sold his company to some young venture capitalists who formed the Litton engineering that we now know. Interestingly enough, Charlie was offered $1 million in cash, or an equivalent amount of shares of Litton at the price of $1.00 a share. Eventually, that stock was selling for well over $100.00 a share – he had chosen the cash.

“Another company that had started before the War was Eitel-McCullough. They specialized in transmitting tubes for the burgeoning amateur radio industry. They were master craftsmen in this art and contributed greatly to the need for high-powered vacuum tubes during the war.

“Another legacy from the Federal Telegraph company were two very large magnets that had been built for the Poulsen arc but had never been used. In the early 1930’s, Ernest O. Lawrence was doing his first experiments with the cyclotron at U.C. Berkeley. Interestingly enough, my wife was taking freshman physics from Dr. Lawrence. She remembered how exciting it was when he would come into the classroom and announce that they had just discovered a new element, such and such, and discovered its characteristics.

“Like most college professors, Dr. Lawrence had very little money to spend. To have designed and built the magnets that weighed about 85 tons each would have been impossible, but he found these two discarded magnets and was thus able to build the first atom smasher. Another spinoff of Federal Telegraph was the work of Fred Kolster who perfected the radio direction finder. Many of the old-timers here will remember the name Kolster Radio.’

“You might liken the Federal Telegraph Company to a supernova, such as appeared a few years ago. A giant star explodes and out of its residue, many new stars are formed. It was from the residue of Federal Telegraph that much of the subsequent developments in silicon Valley depended – the ingredients were trained people, small companies, and above all else, the tradition of engineering at Stanford.

“Another example of pioneer work in the Bay Area was that of Philo T. Farnsworth who came to San Francisco in 1927 to perfect the first all-electronic television system.

“How did Silicon Valley get its name? Long before people ever heard of the transistor, there was considerable activity in electronics in and around Stanford. As an example, the Varian Brothers, while working in the physics laboratory at Stanford, had invented a device called the Klystron, a device that could amplify very high frequency signals, as well as acting as a source of such signals. In the early days of the War before the United States was involved, the Varian Brothers were very much concerned about the threat of bombing and sought a way to detect and locate enemy aircraft. They reasoned that if they could get a very narrow, high-powered radio beam, they would be able to bounce it off an airplane and detect some of the reflecting signals. To do this, they needed a radio signal that had a very short wave length so that a practical sized antenna could be used. This was the driving factor that led to their invention of the Klystron.

“To eventually exploit this invention, Varian Associates was formed shortly after the War. Another use for Klystrons appeared in a different form; atom smashing. Instead of having a curved circular path, such as the cyclotron, a linear accelerator was built, powered by very large cyclotrons. The practicality of this was demonstrated with a 200-foot accelerator and subsequently, with major government support, into the Stanford Linear Accelerator program (SLAC). A two-mile long device located in the hills behind Stanford.

“Shortly after the War, a young American engineer brought from Germany a magnetic tape recorder. The potentiality of this technique was quickly recognized by an old friend of Charlie Littons’s, Alexander M. Poniatoff, who founded the company, Ampex, which name was derived from is initials and ‘ex’ for excellence. This company led the field in audio and eventually video recording for many years.

“In 1947 Bell Telephone Laboratories invented the transistor that was to revolutionize the field of electronics. Arnold Beckman, a professor at Cal Tech who founded Beckman Instruments, soon recognized the importance of the transistor. He asked one of the co-inventors, William Shockley, to set up a company to work on semiconductors. Bill’s father had taught at Stanford and Bill himself had spent his early days in Palo Alto. It was for this reason and with a little coaching from Professor Terman that he selected Palo Alto as the site for the new company.

Fred Terman, who had been Dean of Engineering and subsequently became Provost, recognized the importance of an industrial park on University lands. He felt that there could be a two-way benefit from such a development. Industry could benefit by its proximity to the University and the University could benefit from its high-tech neighbors. This certainly proved to be the case. The Shockley Semiconductor Laboratory was established in 1955 and was one of the first tenants of the newly developed Industrial Park.

“Shockley was a brilliant engineer, but management was not his forte. He had accumulated a constellation of brilliant scientists and engineers, but they soon became disenchanted and sought financial support elsewhere for their ideas, Venture capitalists were not yet readily available and they turned to Fairchild Camera & Instrument for financial assistance. In 1957, Fairchild agreed to support the project and the company called ‘Fairchild Semiconductor’ was founded, with Robert Noyce as its President. Once the success of this new company was demonstrated, it did not take long before there were other defectors, and more companies were formed with financing now readily available. By this time, ‘Silicon’ was the preferred material and gave its name to the valley.

“But prior to any ‘Silicon,’ the Bay Area had seen the development of the Poulsen arc, the invention of the true vacuum tube, the perfection of the dynamic loudspeaker, some of the first air-to-ground communications systems, first radio direction finding devices, the perfection of the all-eletronic television, key work in the manufacturing of large vacuum tubes, the invention of the Klystron, the perfection of the magnetic tape for recording both voice and sound, and many others. Silicon came to a very fertile valley.

“I think in closing, that particular comments should be made about the role of Stanford University. As mentioned, it was indirectly responsible for the first electronics in the valley, based on the work of Elwell. You might even say that it pioneered some aspects of venture capitalism when President Jordan and his faculty helped finance the Federal Telegraph Company.

“Lewis M Terman, a Professor at Stanford in the psychology Department, is best known for the Terman-Binet intelligence test. However, he had a far more famous son, Frederick Terman, who was a great innovator at Stanford University. Fred was educated as a chemical engineer, but while taking graduate work at MIT, became greatly interested in the field of ‘radio.’ But he did a lot more than that. For one, he talked to two young engineering students, William Hewlett and David Packard, to try their wings in the field of ‘radio.’ It was Terman who had the idea of taking some of the unused land of Stanford University and converting it into an industrial park. It was Terman who conceived the idea of close collaboration between the University and the burgeoning industry in the area. He set up an honors cooperative program in the engineering school that made possible the opportunity for participating firms to be sure that some of their promising new employees might take graduate work at Stanford on a part-time basis with additional funds being paid to the University.

“Expanded enrollment in this program led to the use of television for providing teaching in remote locations. This was viewed with skepticism by many educators, but this criticism was soon quieted by the fact that many of the students participating in these remote sites had better test scores than the students in the classrooms. Terman went on to become the Provost of the University.

“More recently, in an effort to carry on very expensive and broad-based research in semiconductors, a cooperative venture was set up between the university and about twenty firms wherein these firms contributed towards the construction of a new $15 million laboratory for semiconductor research.

“I think it is safe to say that without Stanford, there would not have been a Silicon Valley.”

6/18/92, Typewritten research notes on Silicon Valley history listing several companies with a paragraph or so about each of them.

Undated, typewritten sheet giving a chronological listing of significant events in the Valley

6/24/93, Letter to Hewlett from Richard Goldman, of the International Leadership Reunion thanking him for agreeing to participate in their conference.

9/23/93, Copy of a note from Hewlett’s secretary, Mollie Yoshizumi, to Penny Brown of the ILR sending a biographical sketch, copy attached.

9/24/93, Copy of a note to file saying that Hewlett has invited a man named Harry Saal of Smart Valley Inc., to participate with him at the ILR conference. It adds that Hewlett has informed Goldman of this. A sheet with Saal’s address is attached

9/28/93, Copy of a note from Mollie Yoshizumi to Penny Brown of ILR enclosing a photo of Hewlett

10/22/93, Letter to Hewlett from Susan Mall of ILR giving logistical information on the conference day and enclosing a copy of the conference program

11/9/93, Letter to Hewlett from Richard and Rhoda Goldman Co-Chairs of the conference thanking him for his “very interesting” talk about Silicon Valley and attaching a copy of ILR program book

Undated, Photocopies of the covers and some pages from two books: The Big Score – The Billion-dollar Story of Silicon Valley, by Michael S. Malone; and Charged Bodies – People, Power and Paradox in Silicon Valley, by Thomas Mahon. An unsigned, handwritten “post-it” is pasted on one of them explaining that the pages mention Cy Elwell.

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